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Oil higher on Libya and Saudi worries


Oil higher on Libya and Saudi worries


Crude oil prices are back on the rise as Libyan rebels vowing “victory or death” reportedly battled with pro-Gadaffi forces near the major oil terminal of Ras Lanuf.

Also making investors and traders nervous are protests in Saudi Arabia’s oil-producing Eastern Province where Saudi Shi’ites took to the streets to demanding the release of prisoners they say are being held without trial.

However, Christophe Barret, global oil analyst at Credit Agricole Corporate and Investment Bank, said he thought the Saudi situation was not a major cause for concern.

“Saudi Arabia is the main risk in the region — it has all the spare capacity, and if there is unrest and production disruption then it means an explosion in oil prices. But I think the risk is an exaggeration,” he said.

He argued there were always problems between the Shi-ites and the Sunnis. “I don’t think it will go like Libya, but the Eastern Province is a significant oil producing province of Saudi Arabia so that is why everyone is looking at it.”

Asked about Libya, Commerzbank analyst Carsten Fritsch said nobody now expected Venezuelan President Hugo Chavez’s proposals for an international panel to negotiate an end to the turmoil to work.

“The rebel leader has rejected the plan and the continued air attacks by Gaddafi’s forces on the rebel strongholds give little reason for the rebels to return to the table,” he said.

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